Gujarat High Court
Vital Connections Llp vs The National Faceless Assessment ... on 4 April, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/7622/2022 JUDGMENT DATED: 04/04/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7622 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 7625 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
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Approved for Reporting Yes No
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VITAL CONNECTIONS LLP
Versus
THE NATIONAL FACELESS ASSESSMENT CENTRE & ORS.
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Appearance:
MR. TUSHAR HEMANI, SR.ADVOCATE WITH MS VAIBHAVI K PARIKH,
ADVOCATE WITH MS. RESHAM THAKKAR, ADVOCATE (3238) for the
Petitioner(s) No. 1
MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1,2,3
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 04/04/2025
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE D.N.RAY)
1. Heard learned Senior advocate Mr.Tushar Hemani with learned advocate Ms. Vaibhavi K. Parikh with learned advocate Ms. Resham Thakkar appearing on behalf of the Petitioner and learned Senior Standing Counsel Mr. Varun K. Patel for the Respondents. Page 1 of 7 Uploaded by BINA SHAH(HC00353) on Wed Apr 23 2025 Downloaded on : Sat Apr 26 03:31:52 IST 2025
NEUTRAL CITATION C/SCA/7622/2022 JUDGMENT DATED: 04/04/2025 undefined
2. Rule returnable forthwith. Learned Senior Standing Counsel Mr.Varun Patel waives service of the notice of the rule on behalf of the Respondents. With the consent of the learned advocates for the respective parties, the matter is taken up for hearing, as the issue involved is very short.
3. As the issues arising in these petitions are common they are heard together and disposed of by this common Judgment.
4. Special Civil Application No.7622 of 2022 pertains to Assessment Year 2016-17, whereas, Special Civil Application No.7625 of 2022 pertains to Assessment Year 2013-14. For the sake of convenience, Special Civil Application No. 7622 of 2022 is being taken up as the lead matter.
5. The brief facts of the case are as follows:
5.1 The Petitioner is a Limited Liability Partnership (LLP). One Kauvery Trexim Private Limited (the Assessee) stood amalgamated with Vital Connections Private Limited pursuant to an order dated Page 2 of 7 Uploaded by BINA SHAH(HC00353) on Wed Apr 23 2025 Downloaded on : Sat Apr 26 03:31:52 IST 2025 NEUTRAL CITATION C/SCA/7622/2022 JUDGMENT DATED: 04/04/2025 undefined 15.12.2017 passed by the Ld. National Company Law Tribunal (NCLT). Subsequently, Vital Connections Private Limited was converted into a Limited Liability Partnership under the name Vital Connections LLP (the petitioner herein) with effect from 13.03.2018.
5.2 The Respondent issued a notice dated 31.03.2021 under Section 148 of the Income-tax Act, 1961 ("the Act") in the name of the Assessee. In response, the Petitioner submitted objections to the initiation of the reassessment proceedings vide communication dated 22.07.2021, specifically bringing to the Respondent's attention the factum of merger of the Assessee with the Petitioner. It was contended that the reassessment proceedings were void ab initio, as the notice was issued in the name of a non-existent entity, and accordingly, the Petitioner requested that the proceedings be dropped.
5.3 Thereafter, vide notice dated 14.03.2022 issued under Section 142(1) of the Act, the Respondent called upon the Petitioner to furnish certain information and documents. In reply, the Petitioner Page 3 of 7 Uploaded by BINA SHAH(HC00353) on Wed Apr 23 2025 Downloaded on : Sat Apr 26 03:31:52 IST 2025 NEUTRAL CITATION C/SCA/7622/2022 JUDGMENT DATED: 04/04/2025 undefined reiterated its request for disposal of the objections earlier raised vide letter dated 22.07.2021.
5.4 The Respondent framed the assessment in the case of the Petitioner for the Assessment Year in question vide order dated 30.03.2022, passed under Section 147 read with Section 144B of the Income-tax Act, 1961, determining the total income at ₹81,65,00,000/-. Pursuant thereto, a demand of ₹48,72,39,740/-81,65,00,000/-. Pursuant thereto, a demand of ₹81,65,00,000/-. Pursuant thereto, a demand of ₹48,72,39,740/-48,72,39,740/- came to be raised against the Petitioner.
5.5 The Petitioner submitted an online grievance, wherein it was specifically contended that no "show cause notice" proposing variation to the returned income had been served upon the Petitioner. It was further alleged that the assessment proceedings had been concluded and the order under Section 147 read with Section 144B of the Act had been passed without issuance of the mandatory "show cause notice" and "draft assessment order" as contemplated in law. 6 Aggrieved by the impugned Assessment Order and the demand notice dated 30.03.2022, the Petitioner has filed the present Page 4 of 7 Uploaded by BINA SHAH(HC00353) on Wed Apr 23 2025 Downloaded on : Sat Apr 26 03:31:52 IST 2025 NEUTRAL CITATION C/SCA/7622/2022 JUDGMENT DATED: 04/04/2025 undefined Writ Petition under Article 226 of the Constitution of India, seeking the following reliefs:
"(a) quash and set aside the impugned Assessment Order dated 30.03.22 as well as the demand notice dated 30.03.22 for the Assessment Year 2016-17 at ANNEXURE "A (Colly.)" to this petition;
(b) pending the admission, hearing and final disposal of this petition, to stay the implementation and operation of the impugned Assessment Order dated 30.03.22 as well as the demand notice dated 30.03.22 for the Assessment Year 2016-17 at ANNEXURE "A (Colly.)" to this petition;
(c) any other and further relief deemed just and proper be granted in the interest of justice:
(d) to provide for the cost of this petition."
7. Learned Senior Advocate Mr.Tushar Hemani instructed by Ms. Vaibhavi K. Parikh, learned advocate and Ms. Resham Thakker, learned advocate appearing for the Petitioner have respectively made submissions at different points of time. Mr. Hemani, learned Sr. advocate mainly submitted that the factum of merger of the Assessee with the Petitioner was categorically brought to the notice of the Respondent-Authorities. Therefore, the reopening notice was issued in the name of non-existent entity. Consequently, the Page 5 of 7 Uploaded by BINA SHAH(HC00353) on Wed Apr 23 2025 Downloaded on : Sat Apr 26 03:31:52 IST 2025 NEUTRAL CITATION C/SCA/7622/2022 JUDGMENT DATED: 04/04/2025 undefined assessment proceedings were needed to be dropped.
8. Per contra, learned Senior Standing Counsel Mr. Varun Patel appearing on behalf of the Respondent-Department by placing reliance on the affidavit-in-reply filed by the Respondent No.2 submitted that there is nothing on record to show that the Petitioner had intimated the merger approval order of the learned NCLT, Ahmedabad to the concerned Jurisdictional Assessing Officer, prior to the issuance of notice under Section 148 of the Act. Accordingly, Mr. Patel submitted that the present petition deserves to be rejected on such ground alone.
9. From the perusal of the records, it will be seen that in response to the notice under Section 148 of the Act dated 31.03.2021, addressed to the Assessee in question namely Kauvery Trexim Pvt. Ltd., the Petitioner had responded on 22.07.2021 (uploaded on 23.07.2021) stating the factum of amalgamation and specifically uploading the certified copy of the Scheme of Amalgamation Order passed by the learned NCLT and other annexures subsequently. On Page 6 of 7 Uploaded by BINA SHAH(HC00353) on Wed Apr 23 2025 Downloaded on : Sat Apr 26 03:31:52 IST 2025 NEUTRAL CITATION C/SCA/7622/2022 JUDGMENT DATED: 04/04/2025 undefined 17.03.2022, further response was submitted to notice under Section 142(1) of the Act, dated 14.03.2022, reiterating the position. Therefore, in such circumstances, the Respondents could not have assumed the jurisdiction to issue a notice in the name of a non- existent entity. Following the ratio in the case of PCIT Vs. Maruti Suzuki India Ltd. reported (2019) 416 ITR 613 (SC), the Assessment Order dated 30.03.2022 and the consequent notice of demand under Section 156 of the Income Tax Act, 1961 deserves to be and are hereby quashed and set aside.
10. Accordingly, the impugned Assessment Order dated 30.03.2022 as well as the demand notice of even date are hereby quashed and set aside. It will be open for the Department to issue fresh notice to the Assessee, if statutorily permitted. The petitions succeed and are accordingly allowed. Rule is made absolute to the aforesaid extent. No order as to costs.
(BHARGAV D. KARIA, J) (D.N.RAY,J) BINA SHAH Page 7 of 7 Uploaded by BINA SHAH(HC00353) on Wed Apr 23 2025 Downloaded on : Sat Apr 26 03:31:52 IST 2025